25 Dec Basic And Minimum Wages To Rise Next Year 2019
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The Government has decided to increase minimum wages by VND160,000-200,000 to VND2.92 – 4.18 million per month depending on regions from January 1st, 2019.
According to Decree 157/2018/ND-CP date November 16th, 2018, employees working for enterprises in region one comprising major cities and provinces will enjoy a new minimum salary of 4.18 million while the new levels for those in regions two, three and four will be VND3.71 million, VND3.25 million and VND2.92 million respectively.
Salaries of workers in normal conditions must not be lower than minimum wages. As for skilled workers, they pay must be at least 7% higher than the minimum wage by region.
When raising minimum wages for their staff, employers are prohibited from removing or cutting allowances for workers who work overtime, at night or in a toxic environment. Other allowances, subsidies, and bonuses must be maintained as stated in labor contracts, collective labor agreements, and enterprises’ regulations.
Because of the raising, the cap of unemployment insurance increases up to 83.600.000 VND (20 times of minimum wage), however, cap of unemployment insurance is 60% of average wages of 06 latest employment months and will not exceed five times of minimum wages, 5 x 4.180.000 = 20.900.000VND.
And from July 01st, 2019, the basic salary increases from 1,390,000 VND to 1,490,000 VND. This raising makes the cap of wages for Social insurance and Health insurances increase up to 29.800.000 VND.
And from January 01st, 2022 employees who are foreign nationals working in Vietnam shall be required to participate in the compulsory social insurances program fully if they obtain work permits, practicing certificates, practicing licenses issued in Vietnam, indefinite-term employment contracts or employment contracts valid for at least one year with employers in Vietnam.
How to follow the local labor regulations properly and optimize the personal income tax, corporate income tax, compulsory payable amount?
- Do collect the employee’s profiles properly.
- Prepare labor contracts, labor agreements with technical terms and conditions.
- Prepare for internal salary and wages policy with technical structure incomes for your employees: Position salary – Position allowances – KPI allowances – Bonus…
- Registration for your internal labor rules and codes of.
- Registration for the collective agreement with your employees.
- Prepare monthly payrolls and compulsory reports of social insurance, personal income tax for local employees and foreign employees …
- Manage the compulsory insurances – personal incomes tax for foreign employees (expatriates) separately.
- Update for the latest regulations and get necessary confirmation/certificate from competence state agencies.
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